Listen to the article
Earn High Stable Returns Without Increased Risk
Earning high, regular returns, while mitigating risk and spreading out your investments, isn’t that every investor’s dream? But how do we achieve that?
Traditional investments such as stocks and FDs might be low risk, but don’t offer sufficiently high returns. Plus, investing in the stock market comes with its own risk of market volatility and unpredictability.
You never know what global event can affect markets and cause even high profile stocks to crash.
So what’s the solution? What are some investments that can allow us to earn high stable returns without increased risk?
We believe, the answer might lie with alternative investments. Alternative real estate investments in particular. That, along with creating a diversified portfolio can be the answer to achieving high returns spread out over a number of alternative investments.
Some High Return Investment Options, But With Medium to High Risk
Investments in India like Stocks, Mutual Funds and Unit Linked Insurance Plans (ULIPs), are all market-linked and market dependent.
They could give you better returns later on but they also come with more risk because of their significant instability and unpredictability.
These kinds of investments are appropriate for investors who are prepared to handle a greater level of risk for possibly bigger rewards in the future.
What Are Some Alternative Investments With Good Returns?
Commercial Real Estate: Reaching New Heights
Gulam Zia, the Senior ED of Knight Frank India, has predicted that Commercial Real Estate will increase at a rate of 7-8% in 2024. This growth is the highest ever seen historically for this sector within India.
ICRA, the rating agency, states that India’s market for commercial real estate could potentially expand the office REIT market by 6 to 6.5 times.
In the last five years, supply of REIT offices in India’s top seven cities has grown by 3.3 times and now it is close to touching nearly 82 million square feet
The Indian commercial real estate market is doing remarkably well. As is the office leasing market, in particular. Indian corporates & startups are occupying office leasing spaces, renting co-working & shared work spaces, setting up large campuses for employee education.
The Growth of Commercial Real Estate in India
This remarkable growth in the commercial real estate market in India is driven by various factors.
Firstly, the rapid urbanization and population growth in major cities have created a surge in demand for commercial spaces such as office buildings, retail outlets, and industrial warehouses.
Additionally, the government’s initiatives to promote ease of doing business and attract foreign investments have further fuelled the growth of this sector.
Furthermore, the increasing trend of companies outsourcing their operations to India has led to a significant rise in the demand for office spaces, particularly in the IT and business process outsourcing (BPO) sectors.
Invest in CRE For High Stable Returns
This makes the commercial real estate market an easy choice to venture into if you’re looking for high returns from alternative real estate investments. Commercial real estate is booming, and the rental yields & capital appreciation for commercial properties is very high.
But how do you outright invest in CRE if the price of commercial properties such as office buildings & complexes can go up to 10s or even 100s of crores?
This is where we come in.
Fractional Ownership of Commercial Real Estate
When many investors pool their money to jointly own a piece of real estate, that’s known as fractional ownership. This idea typically applies to expensive properties like high-end commercial spaces or properties.
Each investor owns a fraction of the property, which means that they share both the rights and financial responsibility related to it. It’s an inventive method for people who want involvement in real estate but don’t wish to bear all costs associated with buying property completely on their own.
It brings property ownership to more people, giving them a chance to invest in the property and gain possible returns.
Are People Investing in Fractional Ownership?
The Indian fractional ownership market is around $500 million right now. And based on a recent analysis by JLL, it is expected grow by 10 times and to even exceed $5 billion of Assets Under Management (AUM) by 2030.
Under the SEBI (REIT) (Amendment) Regulations 2024, fractional ownership platforms can start collecting funds for properties with a minimum property value of Rs 50 crore, and minimum funds of Rs 10 lakh per investor, which was earlier at 25 lakhs INR.
Invest in Fractional Ownership of CRE
So, now you know. Fractional ownership of real estate is one of the fastest growing alternative investment options in India right now. And the reason for that is high growth rates (Internal Rates of Return up to 15-8%), increased liquidity, and mitigated risk as the investment is shared across a number of investors.
Invest in Structured Debt
Structured debt, or structured debt backed by real estate is a type of investment where money is lent to real estate developers, or companies, who use that money to construct buildings and real estate assets.
The money lent to these developers, is secured by the real estate asset being constructed or properties or mortgage.
Investors earn fixed, stable returns through interest payments on the loan and property value appreciation.
This type of investment allows people to invest in real estate without direct ownership of property.
However, it can come with problems such as delays in the development of the real estate asset and lower liquidity. But, by choosing the right investment option for structured debt backed by real estate, you can vastly increase the diversification of your investment portfolio, and add another high return investment to it.
This becomes even easier if you invest through alternative investment platforms or through experts who select & oversee the real estate backed investment.
Invest With Assetmonk
Like the name suggests, alternative investments represent a departure from the conventional. Alternative investments may not be for everyone, but are they the right choice for you? This is where we come in.
Assetmonk is a unique player in the real estate alternative investment space By marrying the stability of conventional real estate investments with alternative financial investments, we have constructed an innovative bridge between traditional property investment and contemporary wealth management strategies.
Assetmonk provides a web-based dynamic alternative investment platform, it empowers investors to own stakes in high-value commercial properties, opening up opportunities for them in real estate investments with significantly lower entry barriers.
In doing so; we present investors with a unique avenue for growth by putting them in pole position for reaping off of their financial investments.
Read More
